Intelligent Monitoring Group Limited (IMB) Earnings Call Transcript & Summary

Thanks, everybody. Thanks for your time today, and welcome -- everyone popping in there. Thanks, everyone. Thanks for your time today, and welcome to the Intelligent Monitoring Group, IMB, FY 2026 Full Year Results. I'll throw it to Dave to kick us off. Introducing, sorry, Dave Cavanagh, our CFO of Intelligent Monitoring Group. Over to you, Dave.

Great. Thanks, Dennison. Thanks, everyone, for making the time, especially with all the competing companies that are going out today. So really, I'm just going to focus on 2 slides today. The first one is this one, and then the last slide after Dennison talks is Slide 22, which is around sort of cash and how this sort of moves around in the business. But yes, I think at the first level, I'm just going to talk through each of these key tiles and then pass over to Dennison. So first up here, revenue up sort of 16% year-on-year, and that's been really positive. So if you look at sort of what's driving that, we've had an increase in our installations and then also an increase in our sort of services side of the business, which you can see through the notes in the annual report. And it's also highlighted that we've got about 53% of recurring revenue running through the business. So you can sort of see later in the presentation, New Zealand, whilst revenue is up, had a tougher gross margin sort of position, EBITDA position. But the actual underlying business, the revenue and what the guys have been able to achieve has been quite positive for the year. Underlying EBITDA up 14%. And so, if you think about this, we again had positive momentum in our underlying businesses pushing forward. I think last year, we were sort of talking just about $38 million. There are some one-offs that have taken out of that, which we just put out a bit later, and they come to about $11.5 million. And so, they're sort of focused on sort of receivables, old receivables that we inherited as part of the business, customers, and we're just working through the structure on how to make sure that, that is not repeated going forward and then also some acquired stock that was written off, along with restructuring and M&A activity, which has been a big part. In terms of adjusted underlying NPAT, I suppose this is the big one that we're sort of the proudest of for the period. It has been a significant increase year-on-year. And a couple of really big things driving that, which are below the EBITDA line. So the first one is the financing costs. You'll see in the P&L, financing costs come down from about $19 million to about sort of just around $8 million. And so, there's been a huge effort from an old punitive financing structure to a Tier 1 sort of Australian-based position going forward. And then, also, you'll see, last year, we had about $6 million, $7 million of tax impost running through the business. Because of all the businesses we've acquired, because of all the potential carry for losses and the flow through the accounts, you'll see in the expense item that that's effectively 0 this year. So you've got a combination of underlying business up, finance costs down, tax down, and that's what's really driving that [ $0.06 ] per share underlying position. And that one effectively, the way that we got that number, and there's some notes at the bottom is, you take out the amortization. And the reason we do that is that you don't get a tax deduction for it, and it's an allocation of acquired intangibles that are amortized through the business. In terms of operating cash, again, the big thing is, does this business make money, and the next few tiles are a big indicator of that is that operating cash is up sort of 100%, $22 million for this period. There is a little bit of a working capital impost as well running through the business. And we acquired some working capital during the year, but there is -- on top of that $22 million, there's some working capital that ran through the business as we take on more activity. And then, the other thing is that we obviously had a whole bunch of one-off costs for M&A and restructuring stuff that's also embedded in that $22 million. So really excited about that side of the business, and then ultimately, how much money does this business make. So if you look at operating cash, you take off your CapEx, you take off your AASB 16 leases, then this business actually generated about $8.1 million of cash, which compare that to this time last year, was a negative $4 million number. So again, I'll talk through this on Slide 22 right at the end. And then, the last sort of big thing is leverage within the balance sheet. So we drew down debt of about $35 million in May to pay for the Wormald acquisition. So we took the full freight of the debt impost going up from sort of $85 million to $120 million within that facility. But then, we've only got 1 month of earnings from [ Wormald NZ ]. So you'd expect that, that would continue to delever as we get the annualization of the Wormald acquisition and Red Wolf acquisition flow through the accounts. And again, that will change as we do the U.K. acquisition at a later point in time. So I suppose all metrics up and to the right, which is positive. I'll touch on the cash a bit later in the presentation, but I'll hand it back to Dennison.

Great. Thanks, Dave. So just turning to the next slide, Shenin. So versus guidance, I think it's important, so working away, as Dave said, from EBITDA down to EPS, EBITDA at the bottom end of the range. It does include 1 month of Wormald, but still just above the bottom end there. Just to call out, New Zealand was our, I suppose, issue first part of this year, which we feel like we've limited now. The first part of it was actually just a currency impact, and we've been cruising along for 3 years, a very stable A dollar-New Zealand dollar rate that stepped down. I think you'll see that in other companies. We will see that in other companies. Just a translation effect of about $0.5 million. The other thing is, and I am keen to make this point. Through this journey, I keep emphasizing, we are walking and chewing gum. So we did actually put $1 million of what I call growth OpEx back into the business around ADT Guard's commercial team. We introduced [indiscernible] to come over to the market about a year ago, which hasn't yet returned its, I guess, OpEx costs. It did weigh essentially on the short-term results, but we're very, very happy to have done it, and we think it's a key part of our go-forward. And then, the other part, there is just New Zealand itself, which as we know, had that weak first quarter, which [ remedies ] as we've gone through the year, which we'll get to. As you flow down, though, what we are really happy about is that NPAT level. We are trying to move focus, effort, energy and everything we do to the actual net profit of the business. We do have to adjust for amortization because it is a noncash charge, and we don't have to invest to return that, but it is a feature given the way we've built this business up. And we do have to acknowledge the one-offs as well, which we'll detail later. This year, primarily the biggest part probably just being the M&A costs of Walker, Wormald capital raise, and then of course, ADT U.K. We think -- the way I'd frame this is, this is setting a really solid base. So I think, we look at these numbers and these actuals as being a really, really solid base to which we can work off, for us to forecast off, for us to talk forward. In that regard, just moving to the next slide, Shenin. We're keen to sort of, I suppose, impart upon that so that there is clarity. We're not intending to give guidance today. We will do that as we always do at the AGM, but we are -- I think it's important that people that follow us understand that this company is going to have significant growth at a headline level over the next 2 years. This year is going to be driven by a combination of Red Wolf and Wormald, what we call Project Walker, being in the business for a full year. So we have 1 month in FY '26, which will be a full year in FY '27. We've put the pro forma bridge there, which is public and what we've disclosed before. The U.K. -- ADT U.K., which we are expecting to settle on the 1st of December, we've just received regulatory clearance this week to push forward. We're leading to a pro forma number. And so, again, to look for a base here to think about IMG Group off, if we do nothing else than just execute these acquisitions, which we've done, Project Walker in U.K. to come in December, we have a business that we think at a baseline level today is sort of an $0.08 per share EPS business. Just turning to the -- quickly through the rest of the presentation. So yes, in terms of highlights and just to look at the year, I think it is the case that I think the thing that makes me and probably the Board and those that have been with us on this journey happiest is actually to see the underlying performance of the business coming to pass. And ultimately, we had to and have done a lot to build this business to where it is today, but it's all been on the basis that we're building a business, not just sort of acquiring things. And it's nice to see, and we feel validated to see that actually starting to come through the business. In particular, you can see that in the revenue growth line, and we'll dissect that a bit in a second, cash flow and across the board in all metrics. To call out this year, we had WAPL being -- Western Advance join us and BNP. Western Advance added to our commercial business in terms of giving us true expertise and specialized expertise in oil and gas. And BNP was very much part of that core ADT Guard commercial strategy and has been really fantastic, both of those businesses, and adding into our business and adding into the team. I guess, highlights, remote video monitoring gaining traction. The monitoring capabilities that come off this ADT Guard product have allowed us to apprehend over 75 -- in fact it's 77 this morning -- 78 this morning, I think, after overnight activities of offenders with the police. Something that has not and does not happen in the intrusion security alarm industry globally anywhere. We continue to invest -- we've continued to invest in technology, people, and we continue to try and strengthen our business so that we can become a really enduring and important industrial business. Further than that, we also did a lot of work in New Zealand over this year. Red Wolf is directly -- I'm really proud to have added the ADT -- [ add too ] the ADT New Zealand business. It gives us a much stronger commercial enterprise in New Zealand. If you track our journey, the success we're seeing in Australia today was born off us really reengaging in commercial security first and then driving it down and across the different market sectors. Red Wolf allows us to do that in New Zealand and is already paving and help us pave on top of the work being done in the ADT NZ business itself, widen and increase the opportunity set in that commercial business, and then, further to give mass to New Zealand, but also to follow our monitoring pathway and expertise wider with the acquisition of Wormald in New Zealand. And I think Wormald is a really landmark acquisition for us. It's a very old brand. It's a very proud brand. It's a very highly esteemed business historically. And we are getting the opportunity to essentially put a fresh bit of paint on it and reengage the team. And I'm just absolutely delighted to see how they've done. Those two things had us on good step for what would have been a really impressive, I think, coming '27 year. And then, of course, back right at the end of the financial period, we announced that we are making the bold step into ADT U.K., into the residential market there, a very tight market segment that we're focused on, but it is giving us the ADT brand in the U.K. too, which will potentially over time, create options for us depending on how we go. So, a significant year in FY '26. Just show me the next slide, Shenin. Now, I'll skip through the rest of them. So in terms of who we are today, what does this all really mean? Well, I'd characterize us this way. We've got a really strong financial profile. And notwithstanding we are going to be taking on more debt again to go into the U.K., we're very comfortable inside the gearing ratios that we are in. We stand relatively under-geared to our industry. If you take the private equity and other public companies, we're probably in the middle of the public companies for our space globally. So, very comfortable position. We've got a scaled platform. This last couple of years, looking backwards, has been all about building out our platform in Australasia, understanding how it works, enabling it, finding the customer propositions, and now driving forward. We've got a highly technical and specialized workforce, which is part of the secret to be able to drive and unlock this growth, is the people and their ability to deliver and to deliver on scale and with large customers across a broad network. And that's giving us coverage that links back into our strategic assets being our 4 monitoring rooms in Australia. So in terms of characterizing us, that's how I'd do it. In terms of the way we go to market, Shenin, just on the next slide, if you look at us, effectively, we have got 4 operating businesses today, or brands, I suppose you'd say. So ADT, Australia and New Zealand, of course, shortly, in December, the U.K. Signature Security, which is our partner brand, Wormald, which is our direct fire brand, which we monitor through our monitoring stations, and IMS, which is our wholesale monitoring security brand and wholesale monitoring brand. Just jump to the next slide, Shenin. Just breaking down the performance a little bit. We did this last year, too. There is a tale, essentially, of, I suppose, 3 different parts to build up to the result today. There's Australia, New Zealand, and then the effect of acquisitions in the EBITDA and the revenue. So, at a group level, as we called out, 14.5% growth. The part that I guess makes us most happy is that step-up in organic growth in Australia. I think we're tracking sort of around the 8% growth over the last 18 months. So last financial year was about 8.3%, 8.4%, if memory serves. The first half -- the half before that was about 8%, the same sort of range, mid-8s. And we've seen this year's financial organic growth in Australia step up at 12.5%, which has been driven pretty significantly by that commercial rebuild and pipeline, which we'll talk about shortly. We've got an acquisition earnings effect, so these are just simply the earnings impact of the businesses that we've bought coming into the EBITDA line. And then, of course, we've got the New Zealand business. And to just reiterate quickly what has happened in New Zealand, at the start of this year, the first quarter, we got a timing mismatch. It was a shallow commercial book of business in New Zealand, as distinct to the wide and diverse book we have in Australia. We had a timing mismatch between the end of a major customer long-term piece of work and the start of another major customer's long-term piece of work. So one was the Ministry of -- MSD in New Zealand, and the other start-up is the Auckland Airport domestic terminal, which is a lot of work over many years there. And that caused us to show a gap down as we kept our expenses, but the revenue dipped back and came back. I think the important thing to note is we did -- that did form part of our understanding as to why we progressed our strategy around Red Wolf and bought Wormald in to give New Zealand mass. And then, more than that, we did also go through some management change and refocusing just around skills particularly, more than, say, people. And we've seen that come through in the second half, with the second half being up 42% on the first half delivered. So albeit it weighs on the full year result, the actual direction of what's occurred there and where we're actually at today versus where we were at the bottom of the first quarter, very different places. So we're happy overall with that. Next slide, Shenin. So again, just to keep coming back to how we end up here today and where we are today and what we are trying to do. So characterizing it a different way, the first couple of years of journey for IMB back to essentially when I took over as MD in 2022, was to build the platform. And that enabled us to learn the lessons around a monitoring platform, enabling it for the modern world and being able to widen the services that it offers using available technology, but having to be really open to enabling it and bringing it into our business. We've used that platform in Phase 2 to enter much larger markets, which we'll talk about shortly. And then, this third phase where we're stepping into U.K. [indiscernible] internationally. I would pause and say that's a little bit grandiose. We've gone to the U.K. by opportunity and strategic. That's not to say that we're looking to replicate our entire IMG platform on a much wider scale than this. We fully acknowledge that it's a big step for us, and we are going to be very focused over the next couple of periods and years to just prove up what we have acquired there, which is a very stable business we'll talk to shortly. Just next slide, Shenin. In terms of what we're really doing when talking about widening the services, I think of it this way, the Australian security market, to just pick on that market, we have a slightly wider TAM now also with the fire piece being added in New Zealand. But the overall market size is about $13.6 billion, if you use IBIS numbers. If you look at pure electronic security in a historical context, that's about a $2.3 billion, $2.4 billion market. By using technology, by making the investments we made to put the platform in place, and now by leveraging it into services like ADT Guard and like the broad national network in our commercial business and the use of technology we are doing there for enterprise, we're able to broaden our market opportunity, our total addressable market, significantly. So from what was historically in the electronics, a $2-odd billion market, we see it being a $9 billion market. And it's a lot to do with human replacement. It's using technology as a positive beneficiary, I suppose, of the world we live in, and particularly around AI and the cloud. So that's sort of how I would characterize it. In terms of the opportunity, if you look purely at the intrusion space and turning that into a -- from intrusion being reactive to guarding being proactive, our starting market is 14.1 million premises. They consist of commercial and residential properties. That is very low penetration, particularly on the residential side in Australia to elsewhere in the world. We think the solution sets we're bringing in today, again, particularly ADT Guard, will lead ultimately to much higher penetration, given the quality of the service and the effect that it is having. Just jump to the next slide, Shenin, please. So in terms of those 2 drivers, obviously using technology to widen that total addressable market, the 2 key areas being commercial security. So we embarked on this journey when we bought ADT in AU and New Zealand in 2023. We had no pipeline for growth at that point, and that business had largely been disregarded and shut down by prior owners. We have brought it back to life, engaged the workforce we have. We've hired a number of people. We've also added to that business with acquisitions, and we've seen the positive impact of that with, I'd also add, almost no marketing spend, just simply reputation, engaging in the market, a pipeline that's gone from $36 million at the end of the first quarter this year. Again, it was, I think, $2 million in the year that we took over, through to ending this period at $72 million. And so, growth rate there over the period, about 26% quarter-on-quarter. We wouldn't expect that to continue by law of large numbers. But we are showing -- trying to show here really what is driving that underlying business and that 12.5% organic growth rate that we reported in Australia. The second key driver for us, just on the next slide, Shenin, is the ADT Guard. And so, at the moment, the really powerful impact on the business in terms of the economics and the reported profitability is that commercial piece. The prospective driver of this business for the long term and the mass market application is this Video Guard business. And so, we started that just over a year ago, too, with no sites initially. And we exit this year now with over 1,000 sites monitored with ADT Guard around Australia. And I think a couple of key points to that. I've mentioned it already. We've had over, to the end of the period reporting against here, 75 arrests with the police. That is something that never happens, or seldom, if ever -- has ever happened, off an intrusion alarm, an alarm where it's triggered when something is happening, you don't know what, but it is happening. In our case, we are watching before an event happens and are able to respond and actually activate the police very quickly to react, hence why we're getting the arrests. More and better than that, we've deterred over 15 events on average every month off the base that we have today. And by our reckoning, we've probably saved Australians -- or sorry, our customers over $1 million in claims so far off this what is a very small base of customers at 1,000. In terms of our overall business at the moment, it represents coming up to about 1% of our customer base. So it sort of speaks to the opportunity as we continue to drive this and look to drive this out into our business and ultimately into our P&L and drivers. Next slide, Shenin. Just turning to the future. As I say, the Wormald and Red Wolf businesses are in the business. We've been underway for some time. I'm really delighted with how they are going. In terms of what's ahead of us is the ADT U.K. I'll quickly just restate it for the benefit of those that aren't familiar with it. The U.K. business delivered around GBP 87 million of revenue in July -- for the year to July '25, has a margin that's quite a bit higher than our business and has a much bigger recurring revenue stream. It is just based on residential security across the U.K. It's very broad -- it goes across the U.K. It's been in the U.K. since 1874, virtually since ADT really started as a brand out of America. It's got over 160,000 customers and is the prime and by far leading residential security company in the U.K. We'll probably jump to the next slide, Shenin. In terms of the opportunity there, clearly there, as is here, and here being more -- as much Australia as it is New Zealand as well, crime is prevalent. Crime is continuing, and it seems unlikely to abate any time soon. And even if it doesn't, I think people's awareness of it is only increasing. In the U.K., forecast market we looked at as part of this shows a really good, strong underlying growth just in application of residential security in the U.K. It's a much more accepted service right off the bat than it is actually in Australia or New Zealand. So we're buying a business we want to see participate in the market growth in the first instance. In the second instance, what we're really looking to do, though, is take the lessons around ADT Guard, the platform, and all the work we've done over the last couple of years that have enabled us to be in the position we're in today, up to the U.K. and make ADT, by far and away, the leading security services company in the U.K. So very exciting for us to do that. It will be, as I said at the start, very positive financially right from the get-go, but it's also around what it does for us in the future, which is what we are focused on. So just jumping to the next slide, Shenin. I guess, wrapping up this and trying to keep it tight. So FY '26 was another, I'd probably say, significant year for IMB. It feels like it's been a series of significant years, and particularly around scale and positioning. I think this year, I'd call out, we really feel like we've got our hands around the business, and we're starting to see the proof of that coming through. And then, we've also taken another bold step in scale and I guess, aspiration. It's a funny word to use in Australia these days, but we'll throw it around. Particularly with the ADT U.K. acquisition, and I think because of the stable nature of that business and the relative price we paid, we see it as a very low-risk but high upside potential acquisition or potential for our portfolio, which we're looking forward to work on. We're seeing the commercial momentum. I mean, if nothing else, sort of proving up our thesis that having a network of direct technicians and employees that are able to respond quickly, that are well-trained, that know what they're doing, does have value, and it's something, particularly in the enterprise and commercial world, I think a lot of customers have felt starved of for probably a decade or 2 now, is proving to bear fruit. That ADT Guard growth coming through is very positive, and we'll really look to try to get that rattling along now over the next couple of years. And then, just, I guess, wrapping it all up into that sort of comment around the underlying growth, stepping up from that 8% to sort of 12% this year would be a good wrap summary for this year. Next slide, Shenin. So looking into the next couple of years, I break it down pretty simply for everyone. We want to keep driving the commercial pipeline and seeing that secured growth and that secured pipeline that we're reporting against there, deliver, but also continue to step up over time. We want New Zealand to prove up the comments I've made this year around the importance and prospectivity of what we've put together down there coming through over the next couple of years, and particularly will be good to see how they go when the economy eases a bit on the fire side. I think that will really help that market along. ADT Guard remote monitoring core to our long-term value and ability to create something very special, I think, on a global basis, and then just the integration in the U.K. So that's sort of our 4 focuses for FY '22 and beyond, which, as I say, at a base level, sees us looking at a pro forma EPS before we start working and delivering on that of around $0.08. Dave, I'll pause there and just throw it back to you for the financials and we can take questions.

Yes, great. And I'm not going to walk everyone through our P&L balance sheet or anything like that. I do just want to talk about Slide 22, and then I'll hand it back to Shenin for questions, is ultimately, and this is what I was sort of talking about during the opening stanza is, did this business make money? Are we generating free cash flow? And so, this is effectively just the cash flow statements in a visual form. You can sort of see the first part outside of the box is effectively your operating cash less your CapEx. And Dennison talked about the CapEx that rolls through the business and what that's needed for. And then, we've got AASB 16 costs running through the business as well. So the gap between $24 million and $32 million is about $8 million, which is the underlying business of what it did. And then, you can see on the right-hand side, which is a whole bunch of activities there. So we bought 3 businesses. We did a cap raise. We increased the debt. And then, we moved around some really small other stuff, and that contributed about $10 million. So from the start of the year to the end of the year, cash is up sort of $18.7 million. But if you think about it really, it's $8 million from the underlying business and which included -- inside of that, that includes about $5 million of the one-off costs. $5 million of it is cash cost that ran through the business, like dealing with receivables and impairment of assets, which is a noncash item. But there was M&A cost in there. There were restructuring costs that we ran through the business to sort of stitch everything together. And then, there's also the working capital imposts that ran through the business. So I think, as the accountant in the room, I quite like the cash flow side and how much cash was actually generated, and then obviously trying to use this as our baseline that Dennison was talking about as we get a full year of Wormald and Red Wolf rolling through, and then also with the U.K. acquisition partway through the year. So I might pass it back to you, Shenin and Dennison.

Yes. Shenin, we'll open the floor, and we can take questions. Thanks very much.

Thanks, Dennison. Thanks, David. I've got, yes, no questions in the Q&A. So if anybody wants to -- if you have any questions, please raise your hand, and...

Richard there.

Well done on a great result and especially the organic growth starting to tick up, which is really nice to see. I think a lot of people have been waiting to see that in the business. My question is on the U.K. acquisition you guys have made. Obviously very transformational. A lot of EBITDA coming into the business now. I was wondering if you could just give us some color on cash conversion in that business and the EBITDA and how that relates to you guys and also the cash conversion, in the Australian business as well, and where you see that progressing going forward.

Yes. Dave, are you happy to take that? Or you want me to do that?

Maybe you do the U.K. one, and then I can talk about the Australian underlying business.

Yes. Look, just the U.K., probably 2 features to this story. One is, EBITDA in the U.K. includes leases that we have restated. So it's, as we like to refer to it, old EBITDA rather than new EBITDA with AASB. So there, from EBITDA down, therefore you really -- in terms of free cash flow, it's CapEx, interest and tax. It is a -- the U.K. does have contracts. So they are selling -- so contracts themselves aren't necessarily the issue. It's whether you're capitalized and/or whether you're subsidizing. And so, we look at there -- on a run rate basis in the last 3 years, there's been about $21 million of CapEx against that business. So in terms of free cash flow from the U.K., I think the EBITDA, we've put, at current exchange rates, about $79 million. You take $21 million off, the CapEx, and that leaves you your free cash flow, which gets added to the business. And then, obviously, just your interest costs across the business and then your tax. In terms of the pro forma, that's why we've been very clear to say we've fully taxed that pro forma. So we probably won't have a full tax rate, certainly not for some time, but we want to make sure that we're setting the base at the right level to give ourselves room to not disappoint, frankly, achieved. So yes, free cash is -- I'd look at it at sort of $79 million less $21 million as a steady state, Richard, and then just interest, tax.

Great. And then, on the Australian side of the business, this graph sort of is highlighting our CapEx at about $8 million. And then, the Wormald business and Red Wolf businesses are quite low CapEx elements. Somewhere maybe between $0.5 million and $1 million of additional CapEx from those 2 businesses coming on, and then, AASB 16 sitting at around $6 million. And then, with the Wormald and Red Wolf businesses, there will be sort of up to $3 million of AASB 16 on that side as well. And then, at the moment, under our current NAV facility, our full freight debt is around $9 million. But as Dennison was just talking about, when we do the full repackaging of the debt facility with the U.K. acquisition, we transition to a different structure, and we fully disclosed in the [indiscernible] presentation, sort of talking about $450 million of gross debt and rates about 6% above LIBOR going through. So hopefully, that gives you the information, Richard, you need to sort of piecemeal it together to get a sense of EBITDA through to cash conversion.

Yes. No, that's very clear and really helpful and positive on the cash generation there. Maybe just also, Dennison, on sort of the U.K. business, I'm just curious how similar it is to your monitoring business in Australia? Are there monitoring rooms sitting there? Is that where a lot of the CapEx is going? And also, the potential of bringing Video Guard as a product there, and are some of the other security players in that market kind of doing similar work on the video side of things?

Yes. All good questions. So I think the way I would phrase the U.K. for people is, essentially around the world, an intrusion alarm system is an intrusion alarm system. There are a lot of different ones, actually, as it turns out, but they all do the same thing, and they've all done the same thing for 50 years, and that's the same in the U.K. Even Verisure, who are the leading growing player in the U.K. over the last decade, are just offering an intrusion system with CCTV cameras. So, a very standard vanilla thing, and we see that everywhere. And I suppose that's sort of why our ears perk up as to the opportunity, given what we're seeing here and what we're doing. The difference in the U.K. to Australia, I think, is on -- you have a thing called a licensed customer and an unlicensed customer. And a licensed customer, which takes a little bit longer to get set up as a customer, means that if you go through -- sorry, if 2 zones of an alarm go off in an intrusion, so somebody is walking around your property, they trigger your kitchen and your lounge, and we get that response, we are able to go to the police, and they may respond. And I always say able to and may. It doesn't guarantee it, and I think -- because the police will say, all right, well, it's a customer who we take seriously. They've been credentialed and indicated by us. Can we go? Should we go? We don't know. It could be a resident. It probably is a thing in that they have to weigh it up with what they're doing. What that means is that the service from the outset in the U.K. feels more valuable than it does in Australia. So you can make the case to a U.K. customer today that there is a sort of element of police protection. And I think a lot of customers feel that they have that, even though it's actually a small proportion of the overall base that's there today. And that leads to higher starting penetration than what we have here and a slightly higher ARPU as well from a customer per month. Our opportunity, of course, is unique, and that is to take the -- from being an intrusion situation to essentially patrolling and prowling the perimeter with our cameras when they are turned on, which is actioned by the customer. And that allows us to go to the police directly, either before an event or right when it's starting, and the police take that very seriously. It's a completely different response mechanism and feeling from the police if they actually know something is happening versus there could be something happening with a customer that could be at risk. And so, hence, why we have the arrests. I think that's the big difference. In terms of us enabling it, part of all of this is, of course, in life generally, is a bit of luck. And our core technology platform that we -- ADT, frankly, uses around the world is about to be enabled with video monitoring. Now, I don't believe most of the ADT businesses probably even realize that, but we do by virtue of the partnerships and journey that we've had, which means that within about the first 6 months -- and I want to be cautious here about setting expectations because there's time to do these things, and it will take a bit to get customers used to what we're doing -- we'll be able to enable ADT Guard by quite simply just going back to that existing customer base, as we will be able to do in Australia if we wish as well. And it's a little bit more complicated here because of the historic customer mix, and actually offer them the service. In terms of delivering it, the room, funnily enough, is enabled for a form of video, and so there will be training and things involved. We don't own the room itself, just to call out. We are using ADT's -- sorry, Johnson Controls' room. That's the very, very end of our chain, though we do everything else for the customer other than the literal response bit. But that room is able to do it. So the big game, as I said, in the U.K. is 2 things. One is, let's get ADT back to market growth. It has fallen off. It's been unloved and very much sort of out. The size -- very small business for Johnson Controls. And then, the other part is to enable it to actually grow market -- grow addressable market and grow share and use ADT Guard, which we think we can start to do within the first 6 to 12 months.

Super helpful. Maybe I'll just ask one more as well. Just on the commercial pipeline that you guys have seen in Australia and New Zealand, obviously, continues to grow rapidly. What's the sort of vertical or sector mix of that pipeline, the customers? And are you seeing some pretty strong demand from -- I guess, there's a lot of work going on in digital infrastructure and data centers and the likes. Maybe you can just give us a flavor of where that growth is coming from.

Yes. I'll take that one. So look, again, it's very broad-based. So I don't think any one customer group area would represent more than 25% of the book, which is -- as we actually -- we did sort of disclose a deeper split in that first quarter result this year, and I think it's largely held the same. I haven't actually run the work, but I haven't noticed any differences. In terms of, I suppose, notable things, we are a beneficiary of data center growth. We do have one customer in particular, who is very well capitalized, is a long-term player in Australia, who we are effectively -- we like to think and been told, their preferred partner. They have a big development pipeline, but it is only sort of proportionate to all the other opportunities we have. So I'm sort of [ close ] to become a data center proxy growth story because it's actually much wider for us than that. I think generally speaking, what's really happening is these -- on a commercial and enterprise level and an intrusion and/or access control system, data and control can lead to a lot more applications and enterprise help and functionality, if it is integrated, if you're running it as one system across a big business. And I think that's what we're seeing. We see, for instance, Sydney Airport looking to tender to try and bring -- they have different access control systems spread throughout the site, which means they don't have one source of true information. If somebody quits, leaves, they have to restart and they've got to get them on multiple systems, they can't really take much from that data, understand it, learn it, control it. I think they're looking to integrate, as an example. And so, it's a broad thing. And I think what I'm really interested in, I guess, and to a degree, it's sort of validating, is that right at the start of this journey when we got ADT, it was because we had large enterprise customers saying, if you were -- if you had direct technicians and the capability you have in your monitoring rooms and you could do all of our work for us, we want you. We want you to do it all. And so, by virtue of just getting ADT, which did have a good reputation in this area, albeit it had a poor finish because of a strategic decision out of Milwaukee and actually enabling it, the customers have come back. We're not being out not seeing ADT all over the world for us to be reporting this growth. What it is our reputation is already established and people understanding. So, a lot of it is actually existing sort of essentially customers who touched ADT at one point and/or that we've acquired but now engaged a different conversation with them and said, we can do more than what we were doing or we have been doing for you, has led to all of this growth. And so, we think there's a lot more left in the commercial security TAM over the next couple of years as we continue to build. We've got to build it as we go, and we've got to make sure our talent is matching our words, which it has to this point, which is great.

That's great, Dennison. Great seeing the progress. Well done, team.

We've got a question on the Q&A. So Dennison, line of credit for the U.K., is there an opportunity to save on financing costs once it's done?